The Pentagon says the cost of the Iran war is $29 billion, a figure that’s higher than the $25 billion price tag it issued to Congress two weeks ago.
But according to one war budgeting expert, the conflict will ultimately cost US taxpayers at least $1 trillion.
On Tuesday, a senior Pentagon official said the new cost of the conflict included updated repair and replacement of equipment along with operational costs.
CNN previously reported that the earlier $25 billion estimate was a lowball figure that did not include the cost of repairing damage to US bases in the Middle East.
Linda Bilmes, a public policy expert at the Harvard Kennedy School, projects that the conflict with Iran will cost American taxpayers at least $1 trillion.
In an online post in April, she writes: “Wars always cost more than expected. Throughout history, those who get into wars tend to be optimistic about the cost and about the length of time it will take.”
“For example, Russia thought it could take control of Ukraine in a few weeks. President George W. Bush fired his economic advisor, Larry Lindsey, for predicting that the Iraq War might cost $200 billion (it ended up costing $5 trillion).”
In the post, Bilmes breaks it down into short-term and medium to long-term costs. Short-term costs include munitions (missiles, bombs, interceptors), maintenance of 2–3 carrier strike groups, maintenance of personnel and combat pay, and lost or destroyed assets such as fighter jets and drones.
She points out that replacement costs are often higher than the historical value of inventory. For example, a Tomahawk missile may be valued at $2 million in inventory, but replacing one today costs up to $3.5 million.
Medium to long-term costs of the war include repairing facilities over the next 4–5 years, restocking inventory with higher-tech weapons systems, and veterans’ care for 55,000 US troops in the region who may be exposed to hazards.
On top of it all, there’s the impact of rising energy prices on the global economy from the ongoing conflict.
The US Department of Energy now says oil prices will likely stay above $100 a barrel in the coming weeks.
Some analysts warn the national average for gas at the pump will eventually hit $5 a gallon.
This post has been updated to correct the spelling of Linda Bilme.
